Canada’s currency fell to the lowest since September 2004 as concern that the global outlook may worsen led investors to take refuge in the U.S. dollar. Equities in Europe and Asia dropped and stock futures in the U.S. declined after the U.K. government took control of Lloyds Banking Group Plc, stoking concern that similar moves may be necessary in the U.S. banking system. “The mood is just ugly,” said Steven Barrow, head of G-10 currency research at Standard Bank Plc in London. “Stocks are the only thing triggering moves at the moment, for the Canadian dollar and the broader foreign exchange market.” The Canadian dollar fell 1.2 percent to C$1.3033 per U.S. dollar at 9:03 a.m. in Toronto, from C$1.2871 on March 6. It touched C$1.3043. One Canadian dollar buys 76.73 U.S. cents. The U.S. dollar outperformed all of the 16 most actively traded currencies except the Swedish krone as the MSCI World Index, a gauge of 23 developed countries, slipped 1.25 percent to 688.78, extending its decline this year to 25 percent. “The only way for stocks to turn around is if we see hard data that shows the market is bottoming,” Barrow said. Canada’s currency, which has declined 6.5 percent this year, after a record 18 percent loss last year, as a global recession depletes demand for commodities, which account for about half of the country’s export revenue. Canada’s currency will strengthen to C$1.27 against the U.S. dollar by the end of June and to C$1.22 by year-end, according to the median forecast in a Bloomberg News survey of 41 economists. The yield on the two-year government bond fell one basis point to 0.94 percent. The price of the 2.75 percent security due in December 2010 rose two cents to C$103.09.

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